Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Ability to Benefit (ATB)
Also False Certification, a type of loan discharge application based on a borrower’s inability to benefit from the education that has been offered from a school, and the subsequent financial aid that was awarded.
Academic Year
A period of time defined for credit hour schools as a minimum of 30 weeks instructional time in which a full time student is expected to complete at least 24 semester or trimester hours, or 36 quarter hours. For a clock hour school the period of time is a minimum of 26 weeks in which a full time student is expected to complete at least 900 clock hours.
Accrual
The process of adding up accumulated interest. Can also be used in verb form, accrue, as in The interest accrues at a rate of 6.8% per year.
Adjusted Gross Income (AGI)
One’s full, or gross, income including wages, alimony and Social Security, as well as business, investment, and dividend income, after certain adjustments are made, but before standardized and itemized deductions are made. Used in the calculation of an individual’s income tax liability.
Administrative Wage Garnishment
Process by which a guarantor, under federal law, may intercept a portion of the wages of a borrower with a defaulted FFELP loan.
Adverse Credit
A derogatory credit status which, in turn, does not meet established status criteria needed in order to approve a PLUS Loan.
Aggregate Loan Limit
The total amount of loan proceeds for which a borrower is eligible by loan and borrower type throughout the student’s academic career.
Amortization
The process of gradually repaying a loan over an extended period of time through periodic installments of principal and interest.
Amnesty
Forgiveness of interest, penalties and/or the principal of a student loan. This is rarely offered to student loan borrowers and only under extraordinary circumstances.
Annual Loan Limit
The maximum loan amount that can be approved for a borrower during an academic year.
Anticipated Graduation Date
The date a student is expected to complete the academic program requirements.
ASA Direct®
The loan origination tool developed by American Student Assistance (ASA) for use by our school, lender, and borrower partners.
Assistantship
An arrangement that provides graduate students an opportunity to assist a professor in the teaching of an undergraduate class. Assistantships can be granted as financial aid, with the student receiving a full or partial tuition waiver, fee payment, and/or a small stipend.
Attend Code Change Report (ACCR)
A monthly report generated by ASA to inform lenders and servicers about students who have withdrawn, graduated or have ceased to be enrolled at least half-time. Lenders and servicers require this information as they need to know when to verify a student’s entrance into repayment of the interest and/or principal of the loan.
Automated Clearing House (ACH)
A pre-authorized, electronic method of transferring funds between accounts.
Award Letter
The letter that a student receives annually detailing how that student’s financial aid package will be awarded for the upcoming academic year.
Bankruptcy
A person who declares bankruptcy, is found to be legally insolvent and his property is distributed among his creditors or otherwise administered to satisfy the interests of his creditors. Federal student loans, however, cannot normally be discharged through bankruptcy.
Billed
Refers to FASTFUND loans. Once a loan has been approved and scheduled for disbursement, a lender is “billed” on the weekly FASTFUND invoice for the guarantee fee and the net disbursement amount of the loan. See “FASTFUND Schedule.”
Blanket Certificate of Guarantee
A loan processing method that allows lenders to approve and disburse loans prior to sending student loan data to a guarantor for guarantee.
Blanket Guarantee
Abbreviated form of Blanket Certificate of Guarantee.
Borrower
A student or parent/legal guardian who, by signing the Application and Promissory Note, is legally responsible for repayment of the loan.
Bright Beginnings
An ASA program that enables defaulted borrowers to rehabilitate their loans, and reverse or avoid the many negative affects of default, by guiding them toward making several, consecutive payments and establishing a regular payment pattern.
Bursar’s Office
Bursar’s Office or Student Accounts Office is the school office that is responsible for the billing and collection of student charges.
Campus-Based Aid
Federal financial aid programs that are administered by eligible schools. The federal government provides the school with a fixed annual allocation, which is awarded by the financial aid administrator to needy students. Such programs include the Perkins Loan, Supplemental Education Opportunity Grant (SEOG) and Federal Work-Study.
Cancellation
The annulment of a loan or portion of a loan.
Capitalization
The practice of adding unpaid interest to the principal balance of a loan, thereby increasing the amount of the loan.
Capitalized Interest
Accrued interest added to the borrower’s outstanding principal.
Claim
A lender request to the guarantor for reimbursement of a loan due to either the borrower’s consistent, consecutive delinquency or failure to begin payment. The lender can also request reimbursement of losses due to the borrower’s death, disability, default or bankruptcy; school closure; or false certification of the borrower’s eligibility.
Closed School Discharge Form
The Federal form (pdf, 68 KB) used by borrowers to apply for loan forgiveness based on the student being unable to finish his or her educational program due to the closure of the school.
Cohort Default Rate
The percentage of defaults to total borrowers calculated for schools, guarantors and lenders within a given fiscal year.
Collection Agency
A company that specializes in the collection of delinquent or defaulted loans. The lender often hires a collection agency to recover defaulted loans.
College Access Centers
Non-profit centers for high school students and their parents to obtain information for getting into college. Based in public libraries in Massachusetts’ Metro-Boston/Worcester area, these centers host workshops and other informational sessions, along with outreach programs at high schools, to promote awareness of college accessibility.
The College Board
A nonprofit educational association of colleges, universities, educational systems and other educational institutions that provides testing services, financial aid software and policy recommendations to the higher education community.
College Info Center (CIC)
Similar to College Access Centers, the College Info Center, located in Washington, D.C, offers a variety of services including academic and financial aid counseling, telephone and online information resources, as well as seminars and workshops for students and families. The center also provides in-service training for staff members from community-based organizations.
College Work-Study (CWS)
College Work-Study is simply a part time job on campus. This term is sometimes erroneously used to refer to the Federal Work-Study Program.
Comaker
1 of 2 married individuals who jointly borrow a Federal Consolidation loan, each of whom is eligible and is held jointly and severally liable for the loan’s repayment. The term also refers to 1 of 2 parents who were joint borrowers of a PLUS loan made prior to April 16, 1999.
Common Account Maintenance (CAM)
An event-driven, transaction-based reporting process for lenders, servicers, and guarantors. CAM facilitates the exchange of loan, disbursement, MPN, and personal records, as well as default aversion assistance, in a standard electronic format. It is fully supported by ASA.
CommonLine®
A standardized format and delivery process for the exchange of student loan information between schools and their federal and private loan service providers.
Common Manual
A FFELP user manual that is written through the cooperative effort of all the nation's guarantors participating in the Federal Family Education Loan Program, The manual is one of a number of efforts by guarantors to simplify and streamline FFELP for schools and lenders. It provides a single, standardized set of current student loan rules and regulations as well as FFELP policy guidance. The Common Manual can be accessed at ASA’s website.
Common Record
A service that provides electronics standards for FFELP participants to exchange loan files and data using Extensible Markup Language (XML).
Community Outreach
ASA’s community outreach programs empower students and their families through financial knowledge and sensible debt management by taking the message to neighborhoods across the country. It is also the name of our Web community, which focuses on ASA’s work within our local communities, our efforts toward legislation in Washington, D.C., and our participation in national student assistance.
Consolidation Loan
A consolidation loan combines several student loans into 1 bigger loan from a single lender. The consolidation loan is used to pay off the balances on the other loans.
Consolidations
Direct-mail newsletter comprised of fact sheets, offers of free counseling, and information regarding repayment options offered by ASA to consolidated federal loan borrowers.
Consummated
A loan or disbursement is consummated if the proceeds (check and EFT) have been negotiated or credited the borrower or student’s account at his or her school.
Cost of Attendance (COA)
An estimate of the student’s educational expenses for a period of enrollment.
Council for Opportunity in Education
Non-profit that administers programs, including federal TRIO programs that help low-income Americans enter college and graduate. The Council also works to advance educational opportunity in postsecondary education and serves as an advocate for administrators, counselors, and teachers in this field.
Credit Rating
A credit rating is a systematic evaluation of the ability of a borrower to handle loans and other types of credit.
Cumulative Loan Limit
See Aggregate Loan Limit.
Dear Colleague Letters
Communications from the Department of Education that update the financial aid community on new federal legislation and changes to existing rules and regulations in order to assist with compliance.
Debit Roster
Refers to FASTFUND loans. A school with a debit roster (having more cancellations in 1 week than disbursements) has a negative balance and must return that balance to ASA so that ASA, in turn, can return the funds to the lenders.
Default
The failure of a borrower to make regular payments when due for a period of at least 270 days, or to meet other terms of the promissory note, whereby the loan is no longer in a “repayment” state, but due in full to the lender.
Default Aversion Assistance
The assistance provided to a lender by the guarantor in order to prevent a delinquent loan from defaulting.
Deferment
A period of time during repayment in which the borrower, upon meeting certain conditions, is not required to make payments of loan principal.
Delinquency
Failure to make a full scheduled payment by the due date.
Dependent Student
A student who relies on their parent(s) or legal guardian(s) for support and who does not meet the federal criteria of a self-supporting student.
Direct Loans
The William D. Ford Federal Direct Loan Program (a.k.a. the Direct Loan Program), is a federal program where the school becomes the lending agency and manages the funds directly, with the federal government providing the loan funds. The terms for Direct Loans are generally the same as for the Federal Family Education Loan Program (FFELP).
Disbursement
The release of loan funds to the school for delivery to the borrower.
Disbursement Date
For FASTFUND lenders and servicers, the disbursement date is the date that the lender funds ASA for the disbursement. The lender can begin billing the U.S. Department of Education for interest and special allowance either on the date the funds are transferred to ASA or 3 days before ASA sends the funds to the school whichever is later. For non-FASTFUND lenders, the disbursement date is the date that the disbursement is issued to the school.
Discharge
The cancellation of a student loan debt due to certain rare circumstances, such as a school closure, false certification, death of the borrower, or total and permanent disability.
Distance Learner
A non-traditional student who fulfills his or her college credit responsibilities in a non-classroom setting, either through a correspondence course, or through online learning.
Due Diligence
The procedures required for attempting to a satisfactorily resolve a delinquency and prevent a default in accordance with federal regulations. The lender must document the performance of these attempts, and the attempts must be at least as forceful as those generally sued for consumer loans.
Economic Hardship Deferment
A temporary postponement of payments on a student loan due to extreme economic difficulties faced by the borrower. This status must be granted to the borrower if he or she qualifies. The interest in federal subsidized loans is paid for by the government while in this status.
ED Form 799
Federal Family Education Loan Program’s (FFELP) Lender’s Interest And Special Allowance Request and Report Form, which lenders and servicers use to submit quarterly loan information reporting of: origination and lender fees collected; interest and subsidized loans that qualify for grace; and authorized deferment and special allowance payments for the life of the loan.
Electronic Data Exchange (EDE)
EDE and EDExpress are programs used by participating schools to electronically receive SARs from the federal processor. At some schools EDE allows students to electronically file their Free Application for Federal Student Aid (FAFSA).
Electronic Funds Transfer (EFT)
Refers to money transactions performed by any electronic means (i.e. Fedwire, ATM and ACH).
Eligible Non-Citizen
Someone who is not a U.S. citizen but is nevertheless eligible for Federal student aid. Eligible non-citizens include U.S. permanent residents who are holders of valid green cards, U.S. nationals, holders of form I-94 who have been granted refugee or asylum status, and certain other non-citizens. Non-citizens who only hold a student visa or an exchange visitor visa are not eligible for Federal student aid.
Eligible School
A post-secondary institution of higher education or a post-secondary vocational school declared eligible by the U.S. Department of Education to participate in the FFELP.
ELM
Also ELM Resources, a non-profit company supported by member lenders, guarantors and servicers that provide and exchange automated (FFELP) and alternative loan data along with updates and loan information via the Internet.
Endorser
A signer of a promissory note who is secondarily liable for a loan obligation. A lender may require a PLUS borrower with adverse credit to obtain a creditworthy endorser in order to receive the loan.
Enrolled
The status of a student who has completed the registration requirements (except for the payment of tuition and fees) at the school the student is attending or will attend.
Entrance Interview
A loan repayment and debt management session required by federal regulations, that is arranged by and conducted by the school for students receiving their first federally guaranteed student loans associated with attendance at that school. The entrance interview must be conducted before the student can receive loan proceeds.
e-Sign
Electronic signature (e-Sign) allows students and parents to sign their MPNs online, speeding the process and providing an efficient and secure paperless method for borrowers to apply for a Federal Family Education Loan. This process also allows borrowers to access and review a copy of their signed MPN online at any time during the life of the loan.
Estimated Financial Assistance (EFA)
The school’s estimate of the amount of federal, state or other scholarship, grant, work or loan program assistance that a student has been or will be awarded for a loan period.
Estimated Income
The assumed income that a person or family will be making, used for forms that require information that is not yet available. Often used when filling out a FAFSA form, relying on the previous year’s tax return as the estimate.
Exit Interview
A loan repayment and debt management counseling session required by federal regulation that is arranged by and conducted by the school for all graduating students or students who are leaving school.
Expected Family Contribution (EFC)
The school’s estimate of the amount which the student, student’s spouse or family may be reasonably expected to contribute toward the post-secondary education during an academic year.
Extended Repayment
A loan repayment plan in which borrowers with $30,000 or more in student loan debt may be eligible to extend the original payback period of 10 years to 25 years. This option lowers a loan’s monthly payment but. Although the loan is paid back over a longer period of time, it increases the total amount of the loan.
Fair Debt Collections Practices Act
Specific laws and guidelines which govern the methods and conduct an institution must follow when collecting funds from delinquent and default borrowers.
FASTAP Application
A pre-printed Application and Promissory Note sent to borrowers for signature. Schools send certification and eligibility information to ASA, and ASA creates an incomplete record on the guaranty system and issues a FASTAP to the borrower.
FASTFUND
A loan disbursement service whereby ASA disburses loan proceeds by check and EFT to schools on behalf of lenders.
FASTFUND Results
Once a lender funds ASA, a variety of results files are created and sent to servicers. If the disbursement is made, a variety of results files are created and sent to schools. These results files contain all disbursement related information for a given disbursement.
Federal Default Fee
A fee charged by a guarantor for each loan it guarantees. In most cases, the lender reduces the amount of the loan proceeds by this amount, and the fee is remitted to the guarantor. The Higher Education Act limits this fee to 1% of the loan principal. Previously called the guarantee fee.
Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the U.S. government and provides deposit insurance for checking and savings deposits up to $100,000 ($250,000 for IRAs) per depositor in member banks.
Federal Family Education Loan Program (FFELP)
Loan program authorized by the Higher Education Act of 1965, including the Stafford, PLUS, SLS and Consolidation Loans. These loans are guaranteed against default by the federal government.
Federal Methodology (FM)
The need analysis formula used to determine the Estimated Family Contribution (EFC). The Federal Methodology takes family size, the number of family members in college, taxable and nontaxable income, and assets into account. Unlike most Institutional Methodologies, however, the Federal Methodology does not consider the net value of the family residence.
Federal Processor
Is the third-party contractor organization that processes the information submitted on the Free Application for Federal Student Aid (FAFSA) and uses it to compute eligibility for federal student aid.
Federal Work-Study (FWS)
A program that provides undergraduate and graduate students with part-time employment during the school year. The federal government pays a portion of the student’s salary, making it cheaper for departments and businesses to hire the student. For this reason, work-study students often find it easier to get a part-time job. Eligibility for FWS is based on need. Money earned from a FWS job is not counted as income for the subsequent year’s need analysis process.
Fellowship
A form of financial aid given to graduate students to help support their education. Some fellowships include a tuition waiver or a payment to the university in lieu of tuition. Most fellowships include a stipend to cover reasonable living expenses (e.g. , just above the poverty line). Fellowships are a form of gift aid and do not have to be repaid.
Financial Aid
Funds that are provided to the student and the family to help them pay for the student’s education. Major forms of financial aid include gift aid (grants and scholarships) and self help aid (loans and work).
Financial Aid Administrator (FAA)
A college or university employee who is charged with the administration of financial aid. Some schools call FAAs “Financial Aid Advisors” or “Financial Aid Counselors. ”
Financial Aid Package
The financial aid package is the complete collection of grants, scholarships, loans and work-study employment from all sources (federal, state, institutional and private) offered to a student to enable them to attend the college or university. Note that unsubsidized Stafford loans and PLUS loans are not considered need based aid, since these financing options are available to the family to help them meet the Estimated Family Contribution (EFC).
Financial Aid Roadmap
This joint initiative by ASA and Reach4Success targets college-bound high school students and their families and provides them with the strategic information they need for higher education access.
Financial Literacy
The understanding of financial matters, especially in areas such as budgeting, financial planning and investment. Used in reference to Student Financial Literacy at http://www.amsa.com
Financial Literacy Month
The Treasury Department and Congress established April as financial literacy month, to raise awareness and promote greater understanding of financial matters by U.S. citizens.
Fixed Interest Rate
A non-variable, or steady, interest rate. This is a rate that will not change for the life of a loan or other investment.
Forbearance (FORB)
A period of time during which the borrower is permitted to temporarily cease making payments or reduce the amount of the payments. The borrower is liable for the interest that accrues on the loan during the forbearance period. Some forbearances are entitlements for eligible borrowers; others are granted at the discretion of the lender.
Form I-94
The U.S. Immigration and Customs Enforcement (ICE) form completed by any non-resident arriving in the US and describing his or her intent regarding a visit or stay in the U.S.
Free Application for Federal Student Aid (FAFSA)
The application used to apply for federal student aid. All students who need to receive financial aid, whether from government loans, grants, or scholarships, need to complete this form, which can be found at http://www.fafsa.ed.gov.
Garnishment
In financial aid, this most often refers to Wage Garnishment, a process by which the loan holder may collect funds owed on a defaulted student loan by having money deducted from the borrower’s salary and sent directly to a loan holder to satisfy the outstanding balance.
Get Financially Fit for College
Part of the Reach4Success program, this 5-week series of workshops for parents and family members of middle school students helps low-income families of middle school children prepare for college by teaching them basic financial literacy skills and providing college planning support.
Good Standing (as in Loans in Good Standing)
A loan that is paid up to date, or is in a deferment or forbearance status.
Grace Period
The period of time after the student ceases to be enrolled at least half-time and before full repayment begins.
Graduate PLUS
A PLUS loan specifically for graduate or professional students. (PLUS formerly referred to Parent Loan for Undergraduate Students). Not need-based, PLUS loans are granted to credit-worthy students, who may borrow up to the total cost of their education, minus all other aid received.
Graduated Repayment
A student loan repayment plan that allows the borrower to make smaller payments—as little as the interest accruing on the loan—at the beginning of the term (up to 4 years) and larger payments later. This payment plan is designed for borrowers who feel confident that their income will rise in the future.
Graduate Student
A student who is enrolled in a post-baccalaureate program of study at a qualified institution of higher education.
Grant
A grant is a type of financial aid that the student does not have to repay.
Gross Income
Total income (including non-job-related income) before federal and state taxes, credits, exclusions, and other withholdings are deducted.
Guarantee Flow
Also Guarantor Flow, a student loan creation process in which the guarantor is the loan originator with the lender still providing the funds for the loan, using either a school- or borrower-initiated format.
Guaranteed
A loan is considered guaranteed (approved for disbursement) once all information on the Application and Promissory Note has met ED and guarantor requirements.
Guaranteed Student Loan (GSL)
The Guaranteed Student Loan is the old name for the subsidized Stafford Loan.
Guaranty Agency (Guarantor)
A state or private non-profit organization which has an agreement with the Secretary of Education to administer a loan guarantee program under Title IV, Part B of the Higher Education Act of 1965, as amended.
Half-time status
A student attendance status that is less than full-time study, but can be defined differently at each school. Dropping to half-time affects financial aid since awards are based in part on the number of credit hours for which a borrower is enrolled. Dropping below half-time status usually requires the student or borrower to begin repayment after a 6-month grace period.
Higher Education Reauthorization Act (HERA)
The 2005 – 2006 legislation made by Congress to the Higher Education Act (HEA). This act was passed by both Houses of Congress in 2005 and signed by President Bush on February 8, 2006. The Department of Education performed negotiated rulemaking on a number of topics changed by the HERA for implementation on July 1, 2008.
Historically Black Colleges and Universities (HBCU)
Institutions of higher education in the United States that were established before 1964 with the intention of serving the African-American community. There are 114 historically black colleges and universities in the United States.
Holder
Refers to an eligible lender that owns a particular FFELP loan.
Hope Credit
A tax credit that allows people who have paid qualified tuition and related education expenses for themselves, their spouse, or their dependent child to claim a credit of up to $1,650 per eligible student. This credit may not be used in conjunction with the Lifetime Learning Credit for the same student for the same year.
In-School Deferment
A temporary postponement of student loan payments based on a student pursuing at least half-time study at an accredited college or university.
Inability to Benefit Waiver
A loan cancellation based on a student’s inability to benefit from a particular school’s program. These cases are rare, and usually involve a physical, linguistic or distance impediment that prevents the student from being able to learn the curriculum.
Income – Sensitive Repayment Schedule
A repayment schedule for some FFELP loans under which the borrower’s monthly payment amount is adjusted annually, based solely on the borrower’s expected total monthly gross income received from employment and other sources during the course of the repayment period.
Independent Student
A student who is either at least 24 years old, an orphan or ward of the court, veteran or active duty member of the U.S. Armed Forces, a graduate or professional student, a married person or a person that is economically responsible for legal dependents other than a spouse.
Institutional Methodology
If a college or university uses its own formula to determine financial need for allocation of the school’s own financial aid funds, the formula is referred to as the Institutional Methodology (IM).
Institutional Student Information Report
The Institutional Student Information Report (ISIR) is the name for the electronic version of Student Aid Reports (SARs) delivered to schools by EDExpress.
Interest
The charge made to the borrower for the use of a lender’s money.
Interest Deduction
A tax deduction available to qualifying student loan borrowers based on their student loan payments and adjusted gross income during a calendar year. The maximum deductible interest on a qualified student loan is $2,500 per federal tax return.
Invoice
Refers to FASTFUND loans. The invoice is the vehicle used to bill lenders for funds for new disbursements with specific preferred disbursement dates. Lenders wire the net disbursement amount, the federal default fee, and the processing fees to ASA. The invoice is also used to return funds to lenders for cancellations. Invoice may also refer to the monthly guarantee billing issued to non-FASTFUND lenders.
IRS Offset
An interception by the U.S. Internal Revenue Service (IRS) of the income tax refund of a borrower with a defaulted FFELP loan. The same interception of funds can occur to Social Security and retirement benefits. The amount offset, less a processing fee, is forwarded to the Department by the guarantor and ultimately applied to the defaulted loan.
Junior College
Generally, colleges with 2-year programs that grant Associate Degrees; these schools are sometimes utilized as a pre-college alternative.
Knowing Your Loan
A section of ASA’s website that explains everything borrowers need to know about their loan, from eligibility requirements to federal rules and regulations to steps toward repayment.
Late Disbursement
Loan proceeds that are disbursed within 120 days after the end date of the loan period or date that the student ceased to be enrolled at least half-time. The school, in order to request late disbursement funds, must meet specific rules and regulations.
Leave of Absence
Approved leaves of absences are breaks in enrollment, not including a semester or spring break that are requested by the student and approved by the school based upon the school’s published leave of absence policy. Approved leaves of absences may total no longer than 180 days within an academic year.
Lender
A lender is a bank, credit union, savings and loan association, or other financial institution that provides funds to the student or parent for an educational loan.
Lender Flow
A student loan creation process in which the lender is the loan originator, using either a school- or borrower-initiated format.
Lender’s Interest and Special Allowance Request and Report (LARS Report)
The federal form lenders must submit on a quarterly basis to the U.S. Department of Education to report loans eligible for interest and special allowance benefits. Also ED Form 799
Life-Time Learning Credit
A tax credit that may be claimed for the payment of qualified education expenses of students in a taxpayer’s family (i.e., the taxpayer, the taxpayer’s spouse, or an eligible dependent) who are enrolled in eligible educational institutions. The maximum amount that may be claimed is $2,000 (20% of the taxpayer’s first $10,000 of out-of-pocket qualified tuition and related expenses).
Loan Forgiveness
A means by which the total or a portion of a loan’s remaining balance is canceled by the federal government. To qualify for forgiveness, a borrower must perform volunteer work or military service; teach or practice medicine in certain types of communities; or meet other criteria specified by a particular forgiveness program.
Loan Holder
A company that has possession of a loan. Often the holder is also the lender.
Loan Origination
The process of making a new loan once a school certification or MPN is received from either the school or the borrower.
Loan Period
An attendance period or periods within an academic year for which an applicant intends to use student loan proceeds.
Loan Processing Fee
An allowance, paid by the U.S. Department of Education to guarantors to offset the costs of administering the guarantee process, based on a certain percentage of the total dollar amount of loans guaranteed within a specific time period.
Mammoth or ASA Mammoth
The ASA Mammoth is the symbol for education debt. You can learn more about the ASA mammoth at http://www.amsa.com/mammoth.
Mapping Your Future (MYF)
A National, collaborative public-service organization of the financial aid industry that provides free college, career, financial aid, and financial literacy services for students, families, and schools.
Massachusetts Educational Financing Authority (MEFA)
A non-profit state organization that works to make college more accessible and affordable for Massachusetts families, and for out-of-state students who study in Massachusetts.
Master Promissory Note (MPN)
A promissory note under which the borrower may receive loans for either a single period of enrollment or multiple periods of enrollment.
Merit Based Aid
Financial aid awarded on the basis of a student’s excellent performance in school, usually awarded through scholarships or academic related grants, often without regard for financial need.
myASA
American Student Assistance’s website tool that allows for users to customize the information they see and receive from http://www.amsa.com.
National Association of Student Loan Administrators (NASLA)
Composed of guarantors American Student Assistance (ASA), Kentucky Higher Education Assistance Authority, Texas Guaranteed Student Loan Corporation (TG), and Great Lakes Higher Education Guaranty Corporation, NASLA’s purpose is to reinvent the guaranty agency function by moving agencies away from the role of “insurer” to a fee-for-service model.
National Council of Higher Education Loan Programs (NCHELP)
A national committee of lenders, guarantors, and other financial aid administrators that advises and helps develop rules and regulations under FFELP and FDSLP.
National Merit Scholarship Corporation (NMSC)
A not-for-profit organization that conducts 2 academic competitions annually for high school students to win recognition and undergraduate scholarships.
National Student Loan Clearinghouse (NSLC)
The data center and information source for students’ degree and enrollment verification. Approximately 90% of U.S. higher education institutions use this service to report their students’ status.
National Student Loan Data System (NSLDS)
The Department of Education’s central database, NSLDS holds virtually all the information about federal student aid for each recipient. This information is shared among lenders, schools, servicers, guarantors, students, and the Department of Education to maintain accurate records and reporting across the industry.
Needs Analysis
A standardized assessment of the ability of a student and/or a student’s family to contribute toward education expenses.
Negotiated Rulemaking
A process which brings together representatives of various interest groups and a federal agency (in this case the Department of Education) to negotiate the text of proposed rules before they are published in the Federal Register and opened to public comment.
Net Income
The amount of income that one receives after federal and state taxes, credits, exclusions, and other withholdings are deducted from gross income.
No Interest Loan (NIL)
A Massachusetts state sponsored loan program administered by the State Scholarship Office.
Note Holding
In reference to the Master Promissory Note (MPN) a service undertaken by a lender or guarantor by which the original MPN is saved and stored for the duration of the note’s effective period, which is 10 years.
Origination Fee
A percentage of the gross disbursement amount charged by the U.S. Department of Education to offset the government’s cost of administering the FFELP.
Orphan Loan
A loan that has been certified by a school, but has not matched up with an available MPN. Such a loan is not disbursed because the application is considered incomplete.
OSFA (Office of Student Financial Assistance)
The Massachusetts state agency that administers the NIL and state scholarship programs.
Overaward
An amount of aid awarded in excess of demonstrated financial need.
Paid in Full (PIF)
The full payoff of a loan’s principal and interest obligations.
Pathways
ASA’s customer support and guidance service for at-risk borrowers including close work with ASA advisors and customized payment solutions.
Pell Grant
The Pell grant is a federal grant that provides funds of up to $4,050 based on the student’s financial need.
Perkins Loan
Formerly the National Direct Student Loan Program, the Perkins Loan allows students to borrow up to $4,000/year (up to $20,000 total) for undergraduate school and $6,000/year for graduate school (up to $40,000 total). The Perkins Loan has a fixed interest rate of 5% and is awarded by a financial aid administrator to students with exceptional financial need. The student must have completed the Free Application for Federal Student Aid. The interest on the Perkins Loan is subsidized while the student is in school.
PLUS Loans
This loan type is for natural or adoptive parents or stepparents (in some cases) of eligible dependent undergraduate students and eligible graduate or professional students themselves enrolled at least half-time to finance their own education.
Pre-Approval Services
An application completion service whereby ASA obtains any missing information or corrects information from the borrower or school and assumes the lender’s signature on each application processed.
Principal Balance
The outstanding amount of the loan, on which the lender charges interest.
Private Loans
Private loans are education loan programs established by private lenders to supplement the student and parent education loan programs available from federal and state governments.
Professional Judgment
The flexibility given to a financial aid administrator to make adjustments to student eligibility on a case-by-case basis.
Promissory Note
A legally binding agreement the borrower signs to obtain a loan under the FFELP, in which the borrower promises to repay the loan, with interest, in periodic installments.
Proprietary Institution
A private institution chartered as a for-profit business. Some offer degree programs, but the majority offer short-term specialized occupational training programs aimed at supplying workers for specific industries or retraining workers. These schools are seen as fulfilling a need not met by traditional colleges. Also known as Career Colleges and Career Schools.
Publication 970
Federal tax information form that outlines tax benefits for educational expenses.
Quarterly
Once every 3 months or 4 times per year. The interest on Federal loans, such as PLUS, certain Stafford, and Consolidation Loans during a period of in-school, grace, forbearance or deferment, can be capitalized quarterly.
Reach4Success
A Multidimensional college access program that connects students with opportunities in higher education. It focuses on Washington, D.C. Metropolitan area students and families who have traditionally been underrepresented in higher education. Many Reach4Success services are open to anyone seeking assistance with college entry and financing, and all services are free.
Reauthorization
In reference to the Higher Education Act (HEA), the legislative process whereby Congress reviews existing education programs and then renews, terminates, or amends them. The most recent reauthorization of the Act, as amended, was in 1998.
Refund
The difference between the amount the student paid toward institutional charges and the amount the school can retain under the appropriate (e.g. , institutional, state, or accrediting agency) refund policy.
Rehabilitation
A process by which a borrower may bring a FFELP loan out of default by adhering to specified repayment requirements. In most cases, borrowers who regain eligibility (through successful rehabilitation and re-entering repayment) would be eligible for additional Title IV assistance.
Reinsurance Trigger Rate
(Also referred to as Trigger Rate), represents the amount of loans that default in 1 fiscal year as a percentage of the amount of loans in repayment in that same fiscal year. A low trigger rate means that more borrower loans have been kept out of default.
Release
Enterprise software update that contains systems enhancements, upgrades, and “bug” fixes.
Repayment Period
The Period of time for a student loan to be repaid. The standard repayment period for Stafford Loans is 10 years, but it may be extended through other payment options. Borrowers may pay off a loan faster by shortening the repayment period. This carries no prepayment penalties.
Repayment Terms
The number and monthly dollar amount of payments disclosed by the borrower to the lender.
Rolling Admissions
College admissions process by which students are accepted into a program throughout the academic year, as opposed to the traditional late fall/early winter admissions schedule. Students can generally apply at any time, and begin classes at different times during the year.
Roster
The roster is the vehicle used to notify schools of their new disbursements with specified preferred disbursement dates. Schools can receive an EFT roster and/or a check roster. The EFT roster is also used to notify schools of loan cancellations.
Satisfactory Academic Progress (SAP)
The academic progress required of a student in order to receive financial aid. Each school must establish a standard for evaluating a student’s efforts to achieve an educational goal within a given period of time.
Scholarship
Money that is awarded to a student for use of study at an academic institution. Scholarships are usually privately funded.
Secondary Markets
Agencies with the authorization to buy student loans from lending institutions.
Selective Service
Selective Service is registration for the military draft. Male students who are U.S. citizens and have reached the age of 18 and were born after December 31, 1959 must be registered with Selective Service to be eligible for federal financial aid.
Servicer (or Third-Party Servicer)
An entity that enters into a contract with a program participant to administer any aspect of its participation in a Title IV program.
Simple Interest
Simple interest is interest that is paid only on the principal balance of the loan and not on any accrued interest. Simple interest is calculated by multiplying the amount of principal by the interest rate by the amount of time it is accruing. Most federal student loan programs offer simple interest. Note, however, that capitalizing the interest on a loan is a form of compounded interest.
Skip Trace
Diligent efforts to locate a borrower’s telephone number or address when such information is unknown or invalid.
Special Allowance
A percentage of the daily average unpaid principal balance, paid to a lender by the Department on an eligible Stafford, PLUS, SLS or Federal Consolidation loan. Special allowance payments act as an incentive for lenders to make education loans by, in effect, making up the difference between the interest rate charged to a FFELP borrower and market interest rates. The special allowance rate is set by statutory formula.
Stafford Loan
A simple interest, government-guaranteed, no collateral federal loan for students studying in accredited schools as part of a higher education program.
Standard Repayment
The basic payment structure set for a Stafford Loan once borrowers have completed their educational program and their 6-month grace period has ended. The repayment period is 10 years, and monthly payments cannot be lower than $50.00.
Student Aid Report (SAR)
The report that is sent to borrowers and the schools they have chosen which details the findings from the FAFSA (Free Application for Federal Student Aid).
Student Status Confirmation Report (SSCR)
A report which verifies the enrollment and address statuses of students provided to guarantors by schools and transferred to lenders and servicers.
Subrogation
A transfer in the ownership of a defaulted loan from a guarantor to the U.S. Department of Education. Loans to be subrogated must meet criteria established and revised annually by the U.S. Department of Education.
Subsidized Loan
With a subsidized loan, such as the Perkins Loan or the Subsidized Stafford Loan, the government pays the interest on the loan while the student is in school, during the grace period and during any deferment periods. Subsidized loans are awarded based on financial need and may not be used to finance the family contribution. See also Unsubsidized Loan.
Summer Bridge Deferment
A deferment that covers the months between the spring and fall semesters, for students who have finished a degree program, but intend to return to another degree–sgranting program at least part time. This ensures that the grace period is not used.
Supplemental Loan for Students
Supplemental Loan for Students (SLS) are federal loans for financially independent students. This program was eliminated in 1994 with the creation of the unsubsidized Stafford Loan program.
Tax Deduction
See Interest Deduction
Tax-free monies
The funds within a bank trust or custodial account set up in the United States solely for the purpose of paying qualified education expenses for the designated beneficiary of the account (as in Coverdell Education Savings or 529 Plan Accounts.)
Teacher Loan Forgiveness Program (TLFP)
A program that allows partial loan forgiveness for teachers who meet certain employment qualifications, and who had borrowed federal loans during a specific time range (see eligibility rules.) The program was established to encourage individuals to teach in Title I public elementary and secondary schools. The rules allow for $5,000.00 loan forgiveness for someone who has worked in a qualified school for 5 consecutive years. For certain highly qualified math and science teachers, as well as elementary and secondary special education teachers, the limit is $17,500.
Temporarily Disabled
A borrower who, by reason of injury or Illness, cannot be expected to be able to attend an eligible education school or work and earn money during a period of at least 60 days needed to recover from the injury or illness.
The Education Resource Initiative (TERI)
The largest and most experienced non-profit sponsor of private loans for education. TERI is located in the Greater Boston, Mass. area and works to expand college access. Many of TERI’s programs focus on improving college preparation, enrollment, and success for students traditionally underrepresented in higher education.
Think About Tomorrow®
ASA’s slogan. What distinguishes American Student Assistance is our focus on the profound impact successful loan repayment can have on the future—for everyone. We are dedicated to helping students repay and responsibly manage their college financing obligations by learning about the far-reaching benefits of knowledgeable education debt management.
Think About Tomorrow Tours
Information tours to colleges across the U.S., sponsored by ASA, to develop financial literacy for student borrowers.
Third-Party Flow
A guarantee process by which a third party agent initiates and handles loan origination for a lender.
Title IV
A section of the Higher Education Act that authorizes federal loan, work and grant education financial assistance programs.
Totally and Permanently Disabled
the condition of an individual who is unable to work and earn money or attend school due to an injury or illness that is expected to continue indefinitely or result in death.
Transitions
ASA’s written guide for at-risk borrowers and those who are already past due, which defines the steps to financial wellness and offers repayment advisor support that will help borrowers return their loans to good standing.
Train The Trainer
A program offered by ASA, and used frequently in professional training environments whereby trainers obtain the information needed to pass along to others.
Trigger Rate
See Reinsurance Trigger Rate
TRIO
A federally funded education opportunity outreach programs designed to help students from disadvantaged backgrounds stay in school, graduate from high school, and continue their educations.
TRIO Programs
The TRIO programs include: Educational Opportunity Centers, Ronald E. McNair Post baccalaureate Achievement, Student Support Services, Talent Search, TRIO Dissemination Partnership Program, Training Program for Federal, TRIO Programs Staff, Upward Bound, Upward Bound Math–sScience.
Unconsummated Loan
The loan proceeds that the school returned to the lender prior to the borrower’s having cashed the check, or the school having applied the proceeds to the student’s account.
Unsubsidized Loan
A non-need based loan such as an unsubsidized Federal Stafford loan or a Federal PLUS loan. The borrower is responsible for paying the interest on an unsubsidized loan during the in-school, grace and deferment periods, in addition to repayment periods.
U.S. Department of Education (ED)
The U.S. Department of Education administers several federal student financial aid programs, including the Federal Pell Grant, the Federal Work-Study Program, the Federal Perkins Loans, the Federal Stafford Loans and the Federal PLUS Loans. For more information about these programs, please see U.S. Department of Education’s home page at .
Voluntary Flexible Agreement (VFA)
A Voluntary Flexible Agreement is an agreement between a guarantor and the U.S. Department of Education to test new and innovative methods for carrying out the types of activities currently required of guaranty agencies to identify and demonstrate more efficient and effective means to manage the FFEL program.
Wage Garnishment
The process by which an employer is granted the right to attach an employees pay as a means of satisfying a debt. This is 1 of the consequences of student loan default.
Wellness
ASA’ss concept of keeping student loan borrowers in good standing, and assisting them along the life of their loans to remain financially healthy.
Wellness Advisory Council
ASA council comprised of members of the higher education financial aid community who provide us with feedback on our outreach programs and advise on the development of new techniques for ensuring student success.
Withdrawal Date
The date the student withdraws, as determined by the school. The requirements that the school must follow for determining the student’s withdrawal date depend upon whether the school is required to take attendance.
Work Study
Also Federal Work-Study; a government financial aid award program that provides jobs for undergraduate and graduate students with financial need, and encourages them to perform community service and work related to their courses of study.
Write-Off
A loan amount for which there has been a total cessation of collection activity.
X'ers
Also Generation X’ers; the generation roughly defined as Americans born in the U.S. between 1965 and 1980. This was the last group of people to know both the SLS (Supplemental Loans to Students) and the more recent Stafford Loan programs.
Yearly
(In reference to interest rate or interest rate accrual): Once per year.
Zero Fee (or Fees)
Federal student loans in which certain fees, which are paid to the government, are paid by another institution, such as the lender. Some of these fees include origination fee and guarantee fee.
